Real Crypto “Holders” Please Stand Up.
Volatility in cryptographic markets was inexorable, raising questions about whether long-term retention is still a good strategy, especially given that there is an influx of participants in the market that do not necessarily share the views of the original crypto pioneers.
The crypto market continues to test the solution of these HODLers. The sea of red is now more or less an everyday phenomenon, and it is more rigid than ever to separate “valuable” coins from “hype” coins. The positive correlation between the coins warned by some investment banks is partly to blame – there is simply very little difference between the coins. This is what the upcoming ICOs will have to learn to live with. But, maybe there is another way to overcome and reach the aim…
Most of the coins that suffer from this lethargic activity are those that have been built no more than an idea. It is a promise that the team will develop a real working product that will work better and faster than the current alternative, and more importantly, it will have users!
The reality is not so simple. While it’s great to have an innovative idea, it needs to be done in a way that is commercially viable and useful for token holders. Therefore, teams need to have technological insight to create a real platform, and be smart enough to navigate in the ever-changing cryptographic landscape. Projects that have seemed to look good on paper a year ago will not necessarily be the same and take place on the market next year if the regulatory conditions change so much that it prevents the holders from using the platform.
Another factor is that the market is much more reachable. More and more people are involved in crypto “roulette” hoping to achieve impressive results. The behavioral economy begins to work considering the emerging herd mentality of market participants. The end result is a struggle between real “HODLers”, adherents of technology and its use, vs those who simply joined an activity that has become very popular to make quick money. This makes the token valuation, following secondary market listing, particularly difficult to conduct.
So does this mean that there is no longer space for “HODLers”? Does the market favor active trading style as opposed to passive long-only style? The answers are not simple, but to say that “HODL” is dead, would not be right. The market suffers from constant regulatory uncertainty at the same time that there has been a repression on weak advertising practices when Facebook and Google set limits on advertising cryptographic products. However, the main reality remains that crypto is here to stay, regulation and market maturity will take away the crypto economy, and the market will adapt to the new regime.
Perhaps the market should go through a stage of consolidation or decommissioning, as suggested by the CoinJanitor team. However, while everyone is focused on the “broken” crypto market, very few have paid attention to traders, that is, to exchanges and trading platforms. HODLers must look for places that provide good liquidity, encourage ethical management and, above all, act to take advantage of the holders of the tokens!
However, defining terms such as ethical governance is not simple, nor straightforward. Exchanges have come under scrutiny for listing tokens that at best slowly “die” given the limited trading activity. In the case of Centra Token (CTR), prompted exchange desk Binance to delist the token from its platform after the US Securities and Exchanges Commission (SEC) charged the owners of Centra Tech with fraud. Based on that alone, there is reason to argue that exchanges should take on more responsibility and conduct much more thorough due diligence on the token, request information on the proposed business plan, tokenomics, KYC/AML process, and of course, the whitepaper.
However, the definition of such terms as ethical management is not simple and easy. The exchanges were checked for the transfer of tokens, which at best slowly “die” in view of limited trading activity. In the case of Centra Token (CTR), called the Binance exchange table to divide the token from its platform after the Securities and Exchange Commission (SEC) accused Centra Tech owners of fraud. Proceeding from this, there is reason to state that the exchange should take on greater responsibility, request information about the proposed business plan, tokenomics, KYC / AML process, etc.